William Moore's market views are centered around his many relationships with Agricultural producers. His weekly newsletter, AGMASTER, provides a blend of fundamental & technical information used to make prudent hedging decisions. Contact Mr. Moore at (312) 264-4337
It’s one thing to rally $1.40 (865-1005) since the Aug WADSE Report but quite another to do so without correcting! In front of the Sept WADSE, we thought sure they’d be some profit-taking – and then after the neutral report, for sure, the mkt had every excuse to correct but it didn’t happen – in either instance! The mkt has been energized by massive, almost daily Chinese buying and expected shrinkage in bean yields (USDA-51.9)! The Bears say this buying can’t continue and that the looming big harvest will blunt the current, near vertical rally – but the mkts inability to correct speaks volumes about its latent strength!
Much like Nov Beans, Dec Corn has had an uninterrupted upside ride (320-370) with the added plus of leaving an unfilled 3 cent gap on 8/24/20 – a very bullish indicator! Supportive fundamentals include flooding in China’s corn belt -threatening to sharply reduce their crop & stellar exports from China! Also, a weak dollar has made the US very competitive in the world mkt – finally the crop is shrinking from earlier record estimates – production – 14,900 (15,278) & yield 178.5 (181.8) – due to the “flash drought”! What’s ahead is US Harvest & SA planting – and weather issues in either hemisphere could further reduce global supply! Historically, corn prices are still within shouting distance of 10 year lows!
The last two mkt days have been a little give-and-take – with the mkt losing about 5 cents off the Friday WADSE REPORT as World Ending Stocks came in at a record 319 (316) mmt but today Dec Wht gained that back – following Russian Wht higher! Overall the contract will need spillover support from corn & beans to advance higher.
Oct Cat has been locked in a tight range – with lower beef & cash prices & a bulky premium exerting pressure on prices but the resurgent Oct Hog mkt lending spill-oversupport! The mkt will need a resumption of the pre-Labor Day demand in the form of restaurants re-opening – to sustain a new rally from here!
As you can see from the above chart, Oct Hogs have been on a real roller-coaster ride – sparked by the discovery of Asian Swine Flu in Germany! Immediately, South Korea & China suspended imports from the Germans – feeding speculation that the US would be the beneficiary of more exports! In the process, the contract jumped $7 (61-68) in a series of limit moves – but got ahead of itself backing off today several dollars! Still China remains a huge buyer of our pork and this will resume hog’s uptrend!
Questions? Ask Bill Moore today at 312-264-4337